First Pacific Company Limited

FIRST PACIFIC COMPANY LIMITED
PRESS RELEASE
Thursday, 5 May 2005
PLDT GROUP CONSOLIDATED NET INCOME UP 65%;
EARNINGS REACH P9.4 BILLION FOR FIRST QUARTER 2005
DIVIDEND OF P21/SHARE DECLARED
The attached press release was distributed today in Manila by Philippine Long Distance
Telephone Company (PLDT), in which First Pacific Group has a 24.2 per cent economic
interest, and a 31.3 per cent voting interest.
PLDT is the leading telecommunications service provider in the Philippines. It is based in
Manila, and has common shares listed on the Philippine Stock Exchange and ADRs listed on
the New York Stock Exchange and on the Pacific Exchange located in San Francisco,
California. Through its three principal business groups – Wireless; Fixed Line; and
Information and Communications Technology – PLDT offers a wide range of
telecommunications services across the Philippines’ most extensive fiber optic backbone,
cellular, fixed line and satellite networks.
For more information, please contact:
* * *
Anabelle L. Chua Anna V. Bengzon Ramon R. Isberto
Tel: (632) 816-8213 Tel No: (632) 816-8024 Tel: (632) 511-3101
Fax: (632) 844-9099 Fax No: (632) 810-7138 Fax: (632) 893-5174
Further information can be obtained by visiting the web at www.pldt.com.ph.

Press release
PLDT GROUP CONSOLIDATED NET INCOME UP 65%;
EARNINGS REACH P9.4 BILLION FOR FIRST QUARTER 2005
DIVIDEND OF P21/SHARE DECLARED
�� PLDT reports consolidated net income of P9.4 billion for the first quarter 2005; adjusted
net income at P7.0 billion, taking into account effects of foreign exchange gains and
derivative transactions
�� PLDT declares initial 2005 dividend to common shareholders of P21/share
�� Cellular service revenues increase 11% as combined subscriber base surpasses 20
million
�� Consolidated EBITDA reaches P18.5 billion; consolidated EBITDA margin improves to
63% of revenues
�� Consolidated free cash flow surges to P11.3 billion, up from P9.7 billion in the same
period in 2004
�� PLDT Fixed Line reduces debt by US$155 million; consolidated debt declines by
US$165 million
�� Smart to distribute P20.0 billion to PLDT in 2005
MANILA, Philippines, 5 th May 2005 –– Philippine Long Distance Telephone Company
(“PLDT”) (PSE: TEL) (NYSE: PHI) today announced its financial results for the first quarter of
2005, reporting a consolidated net profit of P9.4 billion. In addition, the Company’s Board of
Directors also approved the payment of a P21/share initial 2005 dividend to common
shareholders with the target of achieving a 30% payout level of 2005 EPS. Payment will be
made on 14 th July 2005 to shareholders of record as of 3 rd June 2005. This follows the
dividend of P14/share declared in respect of 2004 which is scheduled to be paid on 12 th May
2005.
Cellular subsidiaries, Smart Communications, Inc. (“Smart”) and Pilipino Telephone
Corporation (“Piltel”), contributed significantly to the rise in PLDT’s consolidated net income.
Without the impact of the peso’s appreciation on foreign exchange translation and derivative
transactions, adjusted consolidated net income rose to P7.0 billion in the first quarter of 2005,
14% over the adjusted and restated net income of P6.1 billion reported in the first quarter of
2004. Service revenues for the PLDT Group increased by 4% to P29.4 billion while
consolidated EBITDA improved to P18.5 billion.
Consolidated free cash flow grew by 17%, from P9.7 billion in the first quarter of 2004 to P11.3
billion in the same period in 2005, enabling the Group to declare an initial 2005 dividend as well
as reduce debts by US$165 million and remaining well on track to meet the 2005 debt
reduction target of US$500 million.

Cellular: Adapting to Market Changes
Consolidated cellular service revenues increased to P17.4 billion in the first quarter of 2005,
11% higher than the P15.7 billion realized in the first quarter last year.
Consolidated cellular EBITDA grew by 7% to P11.1 billion from P10.3 billion. The EBITDA
margin stood at 64% in the first quarter of 2005 from 66% in the same period in 2004. Net
income, as adjusted for the effects of the Peso’s appreciation on foreign exchange movements
and derivative transactions, increased to P5.8 billion from P5.2 billion in the same period last
year.
Net cellular activations totaled 1.04 million subscribers in the first quarter of 2005, bringing the
PLDT Group’s total cellular subscriber base to just over 20 million and maintaining its market
share of about 58%. Smart added approximately 915,000 subscribers while Talk ‘N Text
added approximately 130,000 subscribers to end the quarter with 15.5 and 4.7 million
subscribers, respectively. Net activations in the first quarter of 2004 were 26% higher at 1.4
million and it is expected that subscriber growth will decelerate compared to prior years’
growth.
On 11 th March 2005, Smart launched, for thirty days, the Smart 25 8 Unlimited Call and Text
promo wherein Smart and Talk ‘N Text prepaid subscribers could avail of unlimited on-network
calls or text. The promotion was reinstituted on 21 st April for another 30 days with some
modifications.
Smart’s cellular network has expanded to 36 switches and over 5,400 base stations covering
97% of the country’s population. Capital expenditures were P1.8 billion in the first quarter of
2005.
Free cash flow nearly doubled to P9.0 billion in the first quarter of 2005 from P4.6 billion in the
first quarter of 2004. Smart intends to make a total distribution of P20 billion to PLDT for 2005 -
- Smart paid a cash dividend of P6.0 billion to PLDT in the first quarter of 2005; in addition, it
will pay another P8 billion in June and the balance in the second half of the year.
“As we had previously indicated, we have begun to see a slowing down of subscriber growth
and we expect this trend to continue; a reflection, we believe of changing market dynamics as
well as the effects of SIM-swap activities. Smart has in fact commenced winding down its SIMswap
activities and it is anticipated that although the industry will experience a temporary
correction phase in terms of subscriber count, this should not, however, impact usage and our
underlying revenues. It should, in fact, result in cost savings. Our mandate, therefore, as the
industry leader, is to be responsive to these evolving conditions and find ways to actively
develop new market segments whilst controlling costs. Our competitive advantage, in addition
to our strong cash flows, is that we can do so not just within the wireless sphere but also in
conjunction with the fixed and ICT businesses,” explained Napoleon L. Nazareno, President
and CEO of PLDT and Smart.

PLDT Fixed Line: Looking Ahead
Fixed Line service revenues decreased by 2% to P11.8 billion in the first quarter of 2005, as
the appreciation of the peso dampened local exchange and ILD revenues and the introduction
of the “P10 per call promotion” adversely affected NLD revenues. Launched in February 2005,
the promotion offered a rate of P10 per call to any PLDT landline number nationwide as well as
to all Smart and Talk ‘N Text subscribers. The declines in these segments were partially offset,
however, by an increase in data revenues with the continued growth of broadband services
and the introduction of new service offerings. On 10 th March 2005, PLDT Fixed launched PLDT
WeRoam, a wireless broadband service running on Smart’s nationwide wireless network and
utilizing GPRS/EDGE/Wi-Fi technologies. Aimed at the corporate market, PLDT WeRoam
provides laptop-carrying employees with wireless data connectivity to their corporate Intranets
and to the global Internet. DSL subscribers jumped to 72,700 at the end of the period, from
28,000 a year ago while other relatively new offerings such as High Bandwidth Optical Service
and Shops.work have started to make headway and are expected to register a strong
performance for the rest of the year.
Cash operating expenses were down 2% reflecting the continued focus on various cash control
initiatives. EBITDA was stable at P6.8 billion as the decline in revenues was matched by a
corresponding decline in cash operating expenses. EBITDA margin improved slightly to 58% in
the first quarter this year from 57% in the same period last year.
Capital expenditures for the first quarter of 2005 were at P2.4 billion with the ongoing upgrade
to an IP-based core network.
PLDT’s free cash flow in the first three months of 2005 increased significantly by 61% to P8.0
billion, mainly on account of the P6.0 billion dividend from Smart. Accordingly, PLDT Fixed
Line reduced its debts by US$155 million during the period, thus lowering its debt balance to
US$1.8 billion as of the end of the first quarter of 2005. PLDT Fixed Line will continue to
deleverage aggressively in 2005, thus saving on interest and financing costs and reducing its
risk profile as well.
"Given the geographic coverage and bandwidth capabilities of our various networks, we feel
we are well positioned to deploy the resources of the Group in a well-coordinated manner. We
are looking to a new generation of services for PLDT, services such as PLDT WeRoam that
bring together the strong corporate business of PLDT Fixed and the superior network capability
of Smart, " concluded Nazareno.
ePLDT: Holding Its Own
ePLDT, the Group’s information and communications technology arm, reported a profit of P40
million for the first quarter of 2005.
Consolidated call center revenues grew by 53% to P408 million as a result of continued growth
in transaction volumes and increased capacity utilization. Combined call center seats grew to
2,870, an 81% increase over the same period last year. A third center call center in Iloilo
commenced commercial operations in April 2005 with 400 seats.

Aside from the call centers, ePLDT’s other business segments, which include Netopia TM ,
Vitro TM Data Center and other Internet-related services, registered significant revenue
improvements resulting in consolidated service revenues of P652 million, a 50% increase
compared to P435 million in the same period last year.
“The significant revenue growth across all our business segments is extremely encouraging
and we foresee this positive trend continuing for the rest of the year. We also expect ePLDT to
play a strategic role not only in content development and aggregation for the Group but in the
Group’s transition to next generation services as well”, said Ray C. Espinosa, ePLDT
Managing Director.
PLDT Group: Transformation Underway
“At the end of 2004, the PLDT Group set for itself a number of financial and operational
objectives – this early, I am pleased that we are well on our way to achieving a number of
these goals. We have just announced an initial dividend to our common shareholders of
P21/share which should allow us to achieve our revised target of a 30% dividend payout level
of 2005 EPS. The debt reduction of US$165 million in the first quarter of 2005 is a good start
to achieving our goal of paying down US$500 million for the year. Most importantly, the
transformation of the PLDT Group into a functionally integrated communications business has
begun. Among other initiatives, the upgrading of our copper and fiber optic network into an IPbased
one is underway as we prepare ourselves for the next wave of so-called “disruptive
technologies”. Certainly, we at PLDT have no intention of allowing these technologies to be
self-fulfilling and disrupt our plans – the future is arriving fast and we are determined to be at
the center of it,” said Manuel V. Pangilinan, PLDT Chairman.
###

(in million pesos, except EPS)
2005 2004 (a)
PLDT Consolidated
For the first quarter ended March 31,
Service revenues 29,361
28,107
Non-service revenues 815
2,631
Other income 75
85
30,251
30,823
Expenses 17,325
Income before income tax 12,926
Provision for income tax 3,543
Net income - As Reported 9,361
Net income before FX and derivatives (b)
(a) As restated to reflect adoption of International Accounting Standards
(b) Net income excluding the net impact of gains/losses on FX and derivative transactions
This press release may contain some statements which constitute “forward-looking statements”
that are subject to a number of risks and uncertainties that could affect PLDT’s business and
results of operations. Although PLDT believes that expectations reflected in any forwardlooking
statements are reasonable, it can give no guarantee of future performance, action or
events.
For further information, please contact:
Anabelle L. Chua Anna V. Bengzon Ramon R. Isberto
Tel No: 816-8213 Tel No: 816-8024 Tel No: 511-3101
Fax No: 844-9099 Fax No: 810-7138 Fax No: 893-5174
About PLDT
6,997
EPS, Basic 52.78
EPS, Diluted 47.57
PLDT is the leading telecommunications provider in the Philippines. Through its three principal
business groups – fixed line, wireless and information communications technology – PLDT
offers a wide range of telecommunications services across the Philippines’ most extensive fiber
optic backbone and fixed line, cellular and satellite network.
PLDT is listed on the Philippine Stock Exchange (PSE:TEL) and its American depositary
shares are listed on the New York Stock Exchange (NYSE:PHI) and the Pacific Exchange.
PLDT has one of the largest market capitalizations among Philippine listed companies.
Further information can be obtained by visiting the web at www.pldt.com.ph.
23,107
7,716
2,036
5,686
6,145
31.30
31.30